6 Key Issues Facing Healthcare in the Second Half of 2012
1. Healthcare reform. Now that the Supreme Court has ruled the PPACA largely constitutional, this leads to several interesting questions for the second half of the year.
- Will the implementation of the law move quickly?
- Will the declaration of the Supreme Court that the individual mandate included in the Act is in effect a tax have an impact on the presidential election?
- Will the decision that the Act is constitutional give new legitimacy to President Obama in the face of the independent and the middle of the voting public?
- How much will this issue strengthen the resolve of the Republican party? Will it matter?
- How will funding of much of the Act be achieved, especially if Republicans take control of the Senate?
Healthcare certainly seems to be a key issue in campaigning, which could lead to an absolutely fascinating election. Becker's Healthcare is pleased to be hosting a debate on healthcare reform and the election featuring former Democratic presidential candidate Howard Dean and former press secretary for George W. Bush Ari Fleisher at the 19th Annual Ambulatory Surgery Centers Conference to be held Oct. 27-29 in Chicago.
2. Integration of healthcare systems in preparation for risk products. Certain healthcare systems have gotten well ahead of others in preparing for risk products on the commercial side. A great question revolves around how much of an advantage these systems will have in the market and how quickly will the acceleration of risk sharing products happen. For example, while the country remains largely fee-for-service, will the acceleration lead to a tipping point where there is a much quicker movement towards alternative methods of delivering/paying for care?
We expect integration and the role of health systems in taking on risk to be a topic of discussion at the Becker's Hospital Review Annual CEO Strategy Roundtable to be held Nov. 1 in Chicago. The event features a panel of 12 outstanding healthcare leaders, including Charlie Martin, CEO of Vanguard Health Systems. For more information on the event, click here.
3. Impact on consolidation. The pace of consolidation of independent hospitals and practices had vastly accelerated over the last few years. In 2011, 86 hospital merger or acquisition deals occurred in 2011, the highest number in the past decade, according to data from Irving Levin Associates. The uncertainty of the Supreme Court decision is expected to have caused a slight slowing of consolidation efforts. The question now is whether the decision will cause further acceleration of consolidation, particularly with smaller hospitals and with practices.
4. Investment in healthcare. Over the next few years, we expect there to continue to be tremendous interest in investment in healthcare. Aging of the baby boomer population is expected to drive demand for a variety of healthcare services and products, and if the expansion of health coverage called for by the PPACA does indeed come to fruition, the newly insured are expected to further positively impact volumes. Despite the consolidation of healthcare that has and is anticipated to occur, we have not yet see a reduced amount of opportunities for investment in healthcare.
5. Information system requirements. We continue to see health systems at all levels suffer in their ability to implement technology related to healthcare. Whether this is in the payor processing world or with regard to electronic medical records, it is not clear whether there is a systematic structural weakness or issues in the labor force that will not allow systems and companies to use the type of technology that has been so broadly encouraged by the government. It will be interesting to see whether there is sufficient talent needed to implement and run such concepts effectively.
For example, in February, CMS released its proposed requirements for stage 2 of meaningful use under the Electronic Health Record Incentive Programs for Medicare and Medicaid. While the requirements are intended to improve interoperability and data exchange — both important elements for using electronic data to better coordinate care — many in the industry voiced concerns over several elements of the requirements, such as making providers responsible for patient engagement with their electronic health information.
6. Increased tension between payors and providers. As consolidation increases, we see more tension between the non-consolidated provider groups and large payors. The payors may need to accommodate large systems but are more willing to play hard ball with less critical providers. As discussed in the Wall Street Journal report "Aetna, Doctors Face Off on Costs" (July 5, 2012):
"Under pressure from cash strapped customers, including large employers, managed-care companies are increasingly focused on limiting their physician and hospital networks to rein in costs, and calling out doctors who rack up big charges. Analysts say the trend reminds them of 1990s-era managed-care strategies that helped constrain health spending, but that frustrated doctors and patients.With an eye on these six key issues, we are expecting an extremely interesting second half of the year.
In a separate suit filed in February, Aetna alleged that Los Angeles-area physicians it contracted with intentionally sent patients to six of the outpatient surgery centers that are plaintiffs in the current filing, all run by a company called Bay Area Surgical Management. The centers aren't part of Aetna's network. According to the court records in February case, the doctors were investors in the outpatient centers and stood to profit. The first hearing in the case is scheduled for July 20. The management company didn't respond to requests for comment. Because the surgery centers were out-of-network, they could charge higher prices. Aetna alleged that the doctors agreed to waive copays the patient would fact as a result of receiving out-of-network treatments. Their bills to Aetna totaled $23 million for 1,900 procedures the insurer says were worth only $3 million, according to the suit."
More Articles on Healthcare Reform:PPACA Upheld: 8 Issues Hospitals Should Keep in Mind Moving Forward
Innovation in Healthcare Leadership: The Time is Now
26 Healthcare Leaders React to the Supreme Court's Decision to Uphold the PPACA
© Copyright ASC COMMUNICATIONS 2014. Interested in LINKING to or REPRINTING this content? View our policies by clicking here.
To receive the latest hospital and health system business and legal news and analysis from Becker's Hospital Review, sign-up for the free Becker's Hospital Review E-weekly by clicking here.
New from Becker's Hospital Review